You do. Seems simple enough. However, you would be surprised at the number of creditors that are under the mistaken belief that the debtor will be on the hook for any and all expenses associated with a creditor’s lawsuit to collect on a debt.
For example, your case is scheduled for trial. The parties are not close to settlement. The debtor has retained counsel and has fought you every step of the way. They have offered a 50% settlement. You are not taking a dime less than, “everything your owed and then some.”
You must appear as a witness for trial. The debtor still will not meet your demands. “Well, you tell that son of a b@tch that I’m flying first class; staying at the Four Seasons and charging him for my time out of the office. It’s going to cost him a lot more if I come to court.”
It is at this point that I must kindly point out that the debtor will not be on the hook for any of the aforementioned expenses in this $3,000.00 collection action.
This is result of a general rule of law often referred to as the “American Rule.” The American Rule provides that each party is general responsible for paying its own attorneys’ fees and expenses associated with litigation. Like any rule, there are exceptions. The two most common exceptions to the American Rule are the existence of a statute or contract that provides for the imposition of attorneys’ fees and costs on another party. However, as stated above, the general rule is that every party, event the winning party, must pay its own attorneys’ fees and costs.
The reasoning behind the American Rule is to prevent discouraging people from seeking redress for their perceived wrongs or from expanding legal jurisrudence. The American Rule recognizes that any other rule would have a chilling effect on one’s decision to pursue a meritorious claim merely because they may have to pay the defendant’s expenses if unsuccessful.
In sum, just because you are suing someone don’t think that it isn’t going to cost you.
